Tenkir Seifu (PhD)Asfawossen Teka2024-03-072024-03-072022-06https://etd.aau.edu.et/handle/123456789/2198This research work has had the objective of assessing the practices of contractors pertaining to their project cost management plan, cost estimation process, budgeting and cost control processes. To this effect, the project cost management practices of Local Grade I contractors currently involved in the construction of Federal Road Projects were assessed through questionnaire survey collected from Grade I local contractors. The assessment were made with respect to the four processes of Project cost management knowledge area, and basic element of project costs such as direct costs, indirect costs, profits and risks. The research findings indicated that most contractors are using insufficient inputs and tools to run each part of the cost management knowledge area. Owing to the scarcity of inputs and limited use of tools, it has been noted that most of the contractor’s output such as Cost management plan, basis of estimates, activity cost estimates, cost baseline, project’s funding requirements, cost forecast, change requests etc., were not as detailed as the PMI standard dictates. Moreover, the contractors ranked Risk allowances and Taxes as the most difficult and the least difficult items for estimation respectively .While, Equipment and Taxes were also ranked as cost item deserving the most and the least attention during cost estimation respectively. Need for the work, competition among bidders and market trends were also selected as the first, the second and the third known main factors for the determination of Profit markup in the corresponding order shown above. This paper concludes that most of the contractors donot have an well organized cost management system.Besides,most of them are using insufficient inputs and limited number of tools to run the processes of project cost management. Finally,this paper recommends that contractors should focus on the proper establishment of their project cost management system so as to get the maximum benefit out of each processen-USAssessing Project Cost Management Practices of Local Contractors Involved in the Construction of Federal Road ProjectsThesis